Citigroup Inc.’s (C) private bank is pulling about $410 million from Paulson & Co., the hedge fund seeking to reverse record losses in 2011, according to two people familiar with the matter.

The private bank is redeeming from Paulson’s Advantage Fund and Advantage Plus Fund, said the people, who asked not to be identified because the information is private. Citigroup is also pulling from the Merger and Recovery Funds, the people said.

Armel Leslie, a spokesman for New York-based Paulson, which manages $19.5 billion, and Natalie Marin, a spokeswoman for Citigroup, also based in New York, declined to comment.

The hedge fund, run by billionaire John Paulson, lost 18 percent this year through July in its Advantage Plus strategy, according to a monthly investor update. That fund, one of the firm’s largest, posted a loss of 51 percent last year. Citigroup’s private bank, which told clients this morning of their plans to withdraw from Paulson funds, in May advised clients not to add money to them, a person familiar with the matter said at the time.

To contact the reporter on this story: Saijel Kishan in New York at skishan@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net